Supreme Court sides with Samsung in patent battle with Apple

A U.S. Supreme Court ruling Tuesday brought relief to Samsung in its lawsuit with Apple over smartphone design patents. Illustration: Cult of Mac

The U.S. Supreme Court dealt a major blow to Apple Tuesday when it sided with Samsung in a smartphone patent battle that had the South Korean company staring at hundreds of millions of dollars in penalties.

In a unanimous ruling, the Court ruled a patent violator does not have to turn over all its profits from sales if the stolen design involved certain components and the not the entire device.

The ruling, according to a Reuters report, sends the case back to the U.S Court of Appeals in Washington to determine damages. In a 2012 jury verdict, Samsung was hit with more than $900 million in penalties owed to Apple. This amount was later lowered to $382 million.

Samsung became the top smartphone maker in the world and Apple filed a lawsuit for trademark and copyright infringement in 2011, arguing Samsung’s success resulted from copying certain design features of the iPhone.

Samsung argued it should not have to relinquish all its profits, saying design elements were minor contributions to a product that involves thousands of patents.

Attorneys argued over the term “article of manufacture” and whether a patent violation referred to the finished product or could involve a single component, which would be key to determining damages.

“The term . . . is broad enough to embrace both a product sold to a consumer and a component of that product whether sold separately or not,” Justice Sonia Sotomayor wrote for the court.

The court, however, declined to provide a test by which to calculate damages, but whatever the lower court decides, it will likely be much lower than the nearly $400 million it was ordered to pay.

“The Supreme Court has given Samsung a slight reprieve,” Case Collard, a partner at the international law firm Dorsey & Whitney, told Cult of Mac. The firm specializes in intellectual property disputes. “This decision was only about damages, so Samsung’s liability for infringing Apple’s patent still stands. But now, the damages will likely be much less after a trip back down to the trial court.

“Design patents are an often overlooked tool to protect IP. While they are still very valuable, this decision reduces slightly the advantages of a design patent by limiting the amount of damages that can be recovered.”